I've been thinking a lot about the situation surrounding Bernie Madoff, who stands accused of building a Ponzi scheme that may have defrauded investors of upwards of 50 billion dollars, among them, many Jewish institutions and individuals. The following comes from the blog of friend of Sinai/former congregant, Larry Gellman, who currently resides in Tuscon, Arizona. I think his observations are, as they say, "spot on." His piece is reprinted with permission. As Bernie Madoff sits in his Upper East Side apartment ordering take-out, the rest of the Jewish world is reading, writing, watching, listening to, and forwarding emails, blogs, letters, articles, editorials, and commentaries regarding the lessons to be learned from his now-notorious Ponzi scheme.
Facts are emerging at a snail's pace but the opinions are flying around like Weatherbeater at a paintball match. Due to my intense interest and involvement with pretty much all things Jewish, I am in the path of most of them. Here is a brief accounting of the issues in no particular order except I'm saving what I consider to be the most important for last.
I have received and (since I chair two Jewish organizations myself) have written letters to donors, employees, clients, and volunteers to make sure they know that Agency X had no money invested with Madoff. Depending on the organization, this was due either to conservative investment policies, due diligence, or dumb luck.
A few of my friends have written or forwarded emails bemoaning the fact that the Madoff affair has brought the anti-Semites out of the woodwork again. This
link will send you to one article:
The Anti-Defamation League (ADL) said there had been "an outpouring of anti-Semitic comments on mainstream and extremist Web sites."
"Jews are always a convenient scapegoat in times of crisis, but the Madoff scandal and the fact that so many of the defrauded investors are Jewish has created a perfect storm for the anti-Semites," said Abraham Foxman, ADL national director.
Some friends have sent emails making sure I know how embarrassing it is that Madoff is Jewish. Others have voiced their disgust over the fact that Madoff stole money from fellow Jews and Jewish charities.
Those friends and the ADL have a point, but they need to get over it. This is a sad, even tragic, occurrence. But no one has become a Jew hater over this and there is no one left for us to feel embarrassed in front of other than ourselves. We live in America in 2008--Thanks God.
Meanwhile, no one has talked much about what I consider to be the most fascinating statistic--that all the victims Madoff personally recruited were Jewish and, despite the numerous warnings and red flags, they all stuck it out until the very end. Madoff did have institutional victims who were brought in by hedge fund managers but all of the individual investors and foundations were people he met at all-Jewish clubs or through charities where he was personally involved.
These customers represent a small minority of American Jews but they are unique in their wealth, their influence, and their visibility as leaders of legacy Jewish organizations. They were attracted to Madoff because he came highly recommended by other wealthy, highly-regarded members of the community and because Madoff himself was a Member of the Tribe (MOT).
I use that term advisedly and for a reason because, thankfully, it applies to an ever-shrinking number of Jews in America. It reflects an approach that served and sustained American Jews well for decades as our parents fought to break down discriminatory barriers and to have full access to every opportunity, job, school, neighborhood, and country club in the U.S.
Those were times when there was real anti-Semitism and a big chunk of the American dream was off-limits to our people. It was a battle that needed to be fought.
The good news is that our parents won. And because they did, our generation and our children are full participants in everything this great country has to offer with a range of choices and options that our parents and grandparents couldn't possibly begin to understand. Ironically, pretty much the only restricted institutions that remain are those Jewish clubs (like the ones where Madoff was a member and sought his prey)and schools that are closed to non-Jews.
We now live a world where, according to a recent survey, 44 percent of Americans say they have changed their religion at least once during their lifetime. A generation ago, nobody changed religions--we were born Jewish or Christian and we stayed that way and married that way whether we liked it or not. A few generations before that, most people never moved more than a few miles away from their birthplace and they usually took on the occupation of their fathers.
But now, for the first time in history, American Jews have unlimited choices. We are free to marry whomever we want and live, work, and go to school wherever we want. Most Americans are taking full advantage of this amazing range of new choices. The MOTs wring their hands and call it assimilation. The rest of us are thrilled to be so free.
Most of us still value The Community and we certainly want to derive benefit from The Wisdom--we are just moving beyond The Tribe.
The fastest growing group among Christians are people who describe themselves as non-denominational and by far the largest group of Jews are those who describe themselves as Just Jewish. More than 90 percent say they are proud to be Jewish but they tend not to gravitate to the synagogues, Federations, pro-Israel organizations, and all-Jewish clubs that their parents helped build.
Instead they shop for practices and wisdoms that make their lives more meaningful and better. But the tribalists haven't gotten the message. Ten years ago, a number of Jewish organizations became obsessed with promoting "continuity" which was a buzzword that really meant they were scared to death of rising intermarriage rates. That's because it was assumed that if a person intermarried, they and their children were lost to Judaism forever.
In fact, our synagogues and Jewish day schools are full of kids from families where only one parent is Jewish and the other has not converted. It is not unusual for a family to have a Passover seder in the spring and a Christmas tree in the winter. In some of those families, BOTH parents are Jewish. Only in America.
More and more people are doing more and more Jewish but they'd never consider themselves Members of the Tribe. And most of them would never invest all their money with a man whose methodology was sketchy and whose results were being questioned by a wide range of smart objective people just because he belonged to Jewish clubs and gave to Jewish charities. Some may call that assimilation. I call it common sense.
Which brings me back to Bernie Madoff and his victims. All of his victims were Jews but not all Jews were victims. In a perverse way, that is the exact opposite of what is often said about the victims of the Holocaust.
In Madoff's case, only the tribal Jews were willing to invest and to keep all of their money in a situation where red flags were being waved like crazy all over the place.
As Exhibit A, I submit this
article from Time Magazine:
The article, entitled "How I Got Screwed By Bernie Madoff," was written by investor Robert Chew. He explains that all of his money and that of his wife's entire family (more than $30 million) was invested with Madoff.
But look at what he says:
"The call came at 6 p.m. on December 11. I had been waiting for it for five years...
I think everyone knew the call would come one day. We all hoped, but we knew deep down that it was too good to be true, right?"
Which brings us back to the original question: Why did so many smart people give Madoff all their money and sit back and do nothing when it became clear--or at least seemed likely--that he was reporting unrealistic results?
Part of it was human nature but I believe a bigger part was related to the rules of the game governing Members of the Tribe--the Chosen People at the Jewish clubs and charities where a select group of their friends and associates were also invested with Madoff. There are certain unwritten rules that go along with membership in that group. The first is that you never criticize Israel in public and the second was apparently that you don't question Bernie Madoff. To question Madoff would have been an affront to the other members and particularly those respected tribal leaders who got them in the door in the first place. Never mind the facts and never mind the gnawing feeling described by Robert Chew that this wasn't going to end well.
The Madoff catastrophe has left the Jewish community reeling financially and emotionally. It has also been jarring for many of us to realize that a fellow MOT could do this to his own.
But the major positive lesson that might be learned is that it's time to move beyond tribal thinking for our own good. We can't and shouldn't abandon the idea of community and a shared responsibility for each other's welfare. But we live in an open, pluralistic world where the true value of Judaism is now reflected by our wisdom, ethics, and values--not by our need to stick together and blindly trust only our own. Most American Jews realized this a long time ago. Hopefully more of our Jewish organizations and their leaders will finally get the message.
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